Sony says its PlayStation consoles could get more expensive if China tariffs are expanded

[midian182]

In brief: Sony has warned that its PlayStation consoles will experience price increases if the Trump administration carries out its threat to expand tariffs on Chinese goods.

Tariffs were raised from 10 percent to 25 percent on $200 billion worth of Chinese products back in May, but the US is threatening to expand this to an extra $300 billion of Chinese exports. As previously reported, the list of affected items includes "video game consoles and machines," meaning prices for current and next-gen machines could be inflated.

Now, Sony financial chief Hiroki Totoki has warned that if the expanded tariffs do go through, the company may be forced to pass the extra costs onto consumers, though nothing has been set in stone.

“We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy,” said Totoki.

Studies claim that the extra tariffs would also see consumers paying more for other electronic goods, including phones, laptops, and toy drones. Laptops alone could rise by 19 percent, while cell phone imported from China might rise 22 percent.

Sony, along with Microsoft and Nintendo, already expressed concern over the tariffs last month, warning that consumers would be footing the bill for the extra $840 million in costs, and hundreds of thousands of US jobs could be at risk. Intel, Microsoft, HP, and Dell have also objected.

One option could be for Sony and Microsoft to follow Nintendo’s lead and start moving production of their consoles out of China, but neither company seems in a hurry to go down that road. With the PS5 not expected until fall next year, PS4 sales could start declining at an even quicker pace, and the tariffs might result in the PS5 becoming even more expensive.

Permalink to story.

https://www.techspot.com/news/81227-sony-playstation-consoles-could-get-more-expensive-if.html

 

[Puiu]

"Stop wasting your time with games and do your homework!" - Mom, 2010
"Stop wasting your time with games and finish your work!" - Boss, 2015
"Stop wasting your time with games and pay your taxes!" - Trump, 2019

"Stop wasting your time with life and play games!" - Me, 2080

 

[treetops]

China is paying for it? I don't know how anyone can defend his policies when that is his opener...

 

[tkabou]

No matter, people will still buy it.

 

[tkabou]

China is paying for it? I don't know how anyone can defend his policies when that is his opener...

China IS paying for it, as soon as their cargo unloads at our ports and goes through customs. Individual companies, the choose what to do about the tariffs imposed. They can absorb it or pass the buck on to the customer. They always choose the latter because it allows them to add additional margins, etc without us knowing, all under the pretext of tariffs. China, Europe everyone else doing it is fine, but when the US wants other to play fair it's suddenly a crime.

It's not politics, it's business. The electorate chose Trump, get over it already.

 

[treetops]

They can absorb it or pass the buck on to the customer.

So China does not pay for it, got it. How about Mexico paying for the wall, any thoughts on that?

 

[QuantumPhysics]

I guess fewer people will be able to afford them?

I can already hear wives of deadbeat husbands who stay home and play games all day rejoicing.

 

[tkabou]

They can absorb it or pass the buck on to the customer.

So China does not pay for it, got it. How about Mexico paying for the wall, any thoughts on that?

What part of "China IS paying for it, as soon as their cargo unloads at our ports and goes through customs" you no understand?

Regarding Mexico, the pro-illegals/cheap labor lobby is strangling the whole situation, on both aisles, since it's Congress that controls the budget and fiscal appropriations.

 

[dangh]

They can absorb it or pass the buck on to the customer.

So China does not pay for it, got it. How about Mexico paying for the wall, any thoughts on that?

What part of "China IS paying for it, as soon as their cargo unloads at our ports and goes through customs" you no understand?

You said it yourself:
"pass the buck on to the customer"

Customer will pay for it. This is what Sony's taking about.

 

[ckm88]

Will I get a bigger paycheck if everything from China increases to cover that increase in cost? Eh? Eh?

 

[Dimitrios]

Just don't buy them or threaten them and then Sony will have to take a hit with profits which would be a crumb and the stockholders will have to deal with it.

 

[dangh]

Just don't buy them or threaten them and then Sony will have to take a hit with profits which would be a crumb and the stockholders will have to deal with it.

not too worry, Europe is bigger market for PlayStation, so US buyers will simply have to cope with extra 'tax', Sony will do fine outside of US anyway.

 

[Dimitrios]

not too worry, Europe is bigger market for PlayStation, so US buyers will simply have to cope with extra 'tax', Sony will do fine outside of US anyway.

Or Sony will spread the increase to the whole world so we really don't notice a big difference lol. Add $10-$20 more for Americans or spread it to all the markets and the increase will only be $2-$5.

 

[amstech]

Sony, along with Microsoft and Nintendo, already expressed concern over the tariffs last month, warning that consumers would be footing the bill for the extra $840 million in costs, and hundreds of thousands of US jobs could be at risk. Intel, Microsoft, HP, and Dell have also objected.

These large companies can ***** and complain all they want, what Trump is doing is right. Sorry if your console, made in china, by plant workers getting paid next to nothing, with useless Chinese currency, is going to cost more now as we start to correct this inhumane, greedy corrupt exchange that's abused the lives of millions for 25 + years.

Stocks continue to swing around, and in wider ranges than we've seen in a while. We should expect this type of action following a sharp technical correction--a correction that shook many of the players out of the market, that were contributors to suppressing volatility in recent years (the short vol ETFs among them).

Now, as I've said in the past, people always search for a story to fit the price. Despite the fact that stocks have been swinging around, with little or no story for them to attribute, they were quick to pounce on Trump's announcement about steel tariffs, and have since blamed every down tick in the stock market for it. And they've run wild with trade war scenarios. For those trying to capitalize on that fear scenario, it shows how uninformed, naive or intellectually dishonest they are (most the latter). They like to evaluate it as if there is no context or history.

Where have they all been the past 20-plus years?

China has been manipulating the global markets through their cheap currency policy for the better part of the past 25 years. In pinning down their currency, they cornered the world's export market. And in the process, they emerged as the second largest economy in the world. They also accumulated the world's largest reserve of foreign currencies, which they plowed into global credit markets (mainly our Treasurys) to fuel cheap credit, which ultimately led to the global credit bubble and bust (the global financial crisis). We buy their cheap stuff. They take our dollars and buy Treasurys, supplying more credit to us to buy more of their cheap stuff. And so the cycle goes.

Currencies are the natural balancing mechanism to prevent this bubble/global imbalance from forming. When freely traded in an open economy, the market demand for yuan, given the aggressive growth in the economy, would have driven the value of China's currency higher, making its exports less attractive, and therefore slowing their breakneck growth and wealth accumulation in China, and its ability to fuel global credit. But of course, the government determines the value of the yuan, and keeping the currency cheap is part of the economic model in China (still).

For those that fear retaliation (a historic response to protectionism), this is retaliation... for 20 years of wealth transfer.

The tariff threats address metals, but the currency is a key tool that makes it all happen. For those that like to play it as a political football, Trump is not the architect of the plan. A staunch democratic Senator from New York, Charles Schumer, led the push in Congress for a bill in 2005 to impose a 35% tariff on China. That's what ultimately led to the agreement by the Chinese to allow their currency to weaken (somewhat). With that, I want to revisit my note from late September 2016 (prior to the elections) for a little more backstory on Why Trump Is Right About China (read more here).



Bryan Rich : Forbes

 

[Hexic]

They can absorb it or pass the buck on to the customer.

So China does not pay for it, got it. How about Mexico paying for the wall, any thoughts on that?

Two entirely different situations, they aren't comparable unless you're just looking to stir the political pot. The topic of the article is on Sony & China, not Mexico.

 

[yRaz]

There is a humanitarian crisis in China where our products are only so cheap because they're being made with Chinese slave labor and what are we worried about? The price of our play stations?

These people deserve to have had their jobs sent to China.....